How to Buy Homes With Tax Liens Owed

Tax distressed properties make profitable investments.

Every investment is a risk. Stocks go up and down, commodities are filled with hidden hazards and even precious metals fluctuate. Real estate is one investment that can always be sold, regardless of the state of the economy. The goal of any investment is to buy at a low price and sell for a profit. Real estate makes the profit margin a bit tricky. But, buying tax distressed real estate makes profits almost guaranteed. Investing in tax distressed properties means buying either real estate, or, lien certificates, depending on your available funds and knowledge of the local processes.

Instructions

1. Keep an eye out for tax distressed properties listed in your local classified ads. Review each property and note which ones you are interested in purchasing.

2. Compare each tax lien to the assessed value of the property. Visit the county clerk in the jurisdiction where the properties are located for the most up to date assessments.

3. Meet with the owner of each property. Discuss the tax situation and offer to purchase the property for the amount of the tax lien. Explain that selling the property to you will keep a tax foreclosure off of their credit history. Add a few thousand dollars to your offers as an extra incentive.

4. Attend the tax auctions in the localities where your chosen properties are located. Bid on the properties you have chosen and purchase them for a price between the tax lien amount and the assessment amount.

5. Purchase tax lien certificates from the county clerk's office. These certificates give the government the funds they need for ongoing projects and guarantee you either a monetary or real estate return on your investment.

Tips & Warnings

• Always employ the services of an attorney when purchasing or selling real estate.

References

• CRE Online; Tax Lien Investing Basics; Lillian Villanova; 2011